Quest Diagnostics acquires LifeLabs from OMERS for $1.35B: Employee rights

OMERS sells LifeLabs to Quest

Toronto-based pension fund Ontario Municipal Employees Retirement System (OMERS) has sold LifeLabs Medical Laboratory Services, Canada’s largest medical testing company, to Quest Diagnostics, a U.S.-based firm, for $1.35 billion including debt. The acquisition, which was completed on August 26, 2024, allows LifeLabs to maintain its brand, Canadian headquarters, and management team. Additionally, Quest plans to keep patients’ health data stored within Canada.

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LifeLabs conducts 112 million tests annually across 382 collection centers and 16 laboratories in Ontario, British Columbia, and Saskatchewan. The company employs 6,500 staff. Following the acquisition, the highly concentrated Canadian lab testing market will be even more dominated by U.S. entities, as LifeLabs’ major competitor, Dynacare, is owned by Labcorp, one of the largest U.S. medical testing companies.

Quotes and reaction

• OMERS: “We are thrilled about the opportunity to expand the service offering at LifeLabs, bringing new innovations to this market while extending access for patients in Canada,” said Michael Hill, OMERS’s global head of infrastructure.
• Quest: “This transaction is predicated on our strong belief that we can help LifeLabs accelerate growth and improve healthcare,” said Jim Davis, Quest’s chairman, CEO, and president.

Sale negotiations were lengthy due to the need to establish long-term contracts for test pricing with the Ontario Ministry of Health, LifeLabs’ largest customer. Other large clients include insurance companies, which have been pushing for cost reductions from laboratory testers and medical suppliers.

Who pays severance if Quest doesn’t keep certain LifeLabs employees?

If LifeLabs’ acquisition by Quest results in you losing your job, then OMERS must provide you with full severance pay.

In Canada, the “seller” of the business is responsible for providing proper compensation to staff who lose their job.

WATCH: Employment lawyer Lior Samfiru explains the rights workers have when their employer sells the business on an episode of the Employment Law Show.

If Quest provides you with an employment offer, and you have a good reason for why you don’t want to accept it (i.e. different hours or pay), you might be able to get full severance pay from OMERS.

Even without a good reason you can still get severance, but it’s very likely that you will only receive your minimum entitlements.

LEARN MORE
• Employer sold the business in B.C.? Know your rights to severance
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How is severance pay calculated?

Severance for non-unionized employees in Canada can be as much as 24 months’ pay.

This includes individuals working full-time, part-time, or hourly in B.C., Alberta, and Ontario.

The amount of compensation you are entitled to is calculated using several factors, including:

To figure out how much you could be owed, use our firm’s free Severance Pay Calculator. It has helped millions of Canadians determine their severance entitlements.

If your company doesn’t provide you with the correct amount, you have been wrongfully dismissed and should seek legal counsel immediately.

We regularly resolve wrongful dismissal claims and can help you secure proper severance.

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Can Quest make major changes to the jobs of LifeLabs employees?

In Canada, non-unionized employees at LifeLabs don’t have to accept substantial changes to their job that Quest might try to enforce.

Major modifications, such as a demotion, longer shifts, or reduced pay, are illegal.

When significant adjustments are made to the terms of your employment without your consent, there is a very good chance that you can treat it as a constructive dismissal.

In this situation, the law allows you to quit your job and pursue full severance pay.

If you believe that you have been constructively dismissed, don’t resign before contacting our firm.

ADDITIONAL RESOURCES
• Changes to your employment in B.C.: Your rights
• Job changes in Alberta: What employees need to know
• Can my employer make changes to my job in Ontario?

New employment contracts for LifeLabs staff

If you work for LifeLabs and you receive a new employment contract from Quest, take the time to carefully review it before signing it.

In many cases, these agreements take away key protections that would otherwise be available to non-unionized employees, including:

• Eliminating past service: The new owner might attempt to reduce or eliminate your years of service with your previous employer. Don’t sacrifice your seniority. Length of service is a key factor when determining how much severance pay you are entitled to.
• Reducing severance pay: Some employers try to use a termination clause to reduce your severance entitlements to the bare minimum. Instead of months of pay, you might only receive a few weeks’ pay if you are fired without cause or let go.
• Ability to make changes: The new owner might attempt to add a clause that gives them the right to change aspects of your job (i.e. hours or pay) without your permission or lay you off without penalty.

Employers in Canada can’t legally force non-unionized workers to sign a new employment contract immediately or a few days after receiving it.

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Do LifeLabs staff still have the same workplace rights with a non-Canadian owner?

Yes. Companies outside of Canada can’t use employment contracts to get out of Canadian employment standards legislation.

While Quest is based in the U.S., the company must still adhere to the same employment laws that LifeLabs follows for its Canadian staff.

Received a job offer? Speak with an employment lawyer

Before accepting a new employment contract, have the experienced employment law team at Samfiru Tumarkin LLP review the agreement to make sure your workplace rights are protected.

Our lawyers in B.C., Alberta, and Ontario have successfully represented tens of thousands of non-unionized individuals.

We can help you better understand the terms of the contract and advise you on how best to navigate the situation.